At Treasury Questions on Tuesday (10 March) Emma continued to press Treasury Ministers to close employment loopholes which allow employers to cut workers’ wages by hundreds of pounds each month.
Following a campaign led by the construction workers’ union UCATT, Emma and other MPs, the Government promised to look at the use of so-called ‘umbrella’ payroll companies to reduce staff pay and avoid tax. But it now appears that the Government is unlikely to close the loophole after all.
Emma asked the Financial Secretary to the Treasury, David Gauke MP:
“To follow up the question from my hon. Friend the Member for Leyton and Wanstead (John Cryer), it appears from recent written answers that the Government are leaving open loopholes that see workers lose hundreds of pounds a month from rip-off umbrella companies. Why is that?”
The Financial Secretary replied that the Government were “consulting on the matter” and that announcements would be made “in due course.”
It is expected that the Chancellor will make an announcement on umbrella companies in the Budget later this month. However, written answers to questions show that the Government does not intend to restrict the operation of umbrella companies.
If so, that will be a huge disappointment to thousands of low-paid workers who are employed through umbrella contracts, and who are worse off as a result.
Emma has raised this issue repeatedly with ministers, as well as joining with UCATT and Labour MPs to protest the Government’s failure to act earlier in the year.
Speaking after Treasury Questions, Emma said:
“The Government claimed that it would protect workers from exploitation, but it now looks likely they will break that promise. They have had more than one chance to close this loophole, but they’ve failed to take it. That just shows that standing up for workers is low on this Government’s list of priorities.”